Title

Authors

Topic Category

Production

Publication Date

2011

Keywords

Firm Behavior, Profits, Profit Maximization

Abstract

This begins the discussion of firm behavior. It sets the stage for later discussion of production and cost, by noting that these concepts underly the supply curve that has been previously developed. It explains that firms are assumed to maximize profits, and then discusses the definition and role of profits in an economy.

Recommended Citation

Run Time

4:59

Primary Discipline

Microeconomics

Skills Delivered

Ability to explain the profit maximizing motivational assumption for firms, and why it is related to supply. Ability to explain the profit equation, and the role of profits in a market economy. Ability to explain why profits are a "residual."